percent: MBS RECAP: Prices Hold Steady After Morning Sell-Off - 05/02/12 04:34 AM
The closer and closer we get to 5pm, the more it seems that this morning's ISM-inspired sell-off will simply be an "adjustment" that exchanges the previous narrow, sideways range, for another. Specifically, we notes the narrow range between 103-26 and 103-28 yesterday. Then, after this morning's sell-off, Fannie 3.5 MBS hit 103-22, and although there have been a few brief tests on the low side of that range, prices have held within 103-22 and 103-24 for the rest of the day. This is somewhat comforting considering that further weakness seemed at risk as we approached 3pm, and reinforces the constant theme … (0 comments)

percent: Mortgage Rates Rise Modestly After Strong Manufacturing Report - 05/02/12 04:27 AM
Just before reaching fresh multi-month lows,Mortgages Rates rose slightly today after a stronger than expected read on the manufacturing sector. Overall, rates continue to operate at the same "best-execution" level of 3.875% and today's deterioration would instead be seen in the form of slightly higher borrowing costs (or decreased lender credit toward closing costs, depending on your scenario).
Keep in mind that "best-execution" as we calculate it, connotes the no-closing-cost rate for the best-qualified borrowers in the most ideal scenario. (read more about Best-Execution calculations). For many scenarios, 4.0% continues to constitute a good bang for the buck.
Whatever … (0 comments)

percent: The Day Ahead: National Manufacturing Set To Disappoint? - 05/02/12 04:20 AM
The Day Ahead: National Manufacturing Set To Disappoint?
 
 
Other than the sheer lack of volume/participation, Monday's most notable feature turned out to be Chicago's ISM numbers. The drop from 62.2 last month to 56.2 is a sizable chunk and you'll see it in the chart below, yet markets didn't really respond, at least not yet. There are two interesting considerations here. On the one hand, Chicago PMI is historically fairly well correlated with the National numbers due out today at 10am. Here's a chart of both of them, updated to include yesterday's Chicago PMI, naturally suggesting that the 53.0 … (0 comments)

percent: MBS MID-DAY: A Turn For The Worse After ISM Data - 05/02/12 04:13 AM
Following yesterday's weaker-than-expected Chicago PMI report, markets were geared up for a similarly disappointing national figures in today's ISM Manufacturing Report. Even then, there seemed to be some hesitation to rally too much yesterday, given the stronger employment component of Chicago PMI on a week that concludes with a hugely important Employment report. But not only was the employment component of today's ISM report higher than last time, but the headline PMI ("purchasing management index") surprised to the upside as well, sending a relative shockwave through both equities and bond markets. The key word here is "relative," as the weakness isn't … (0 comments)

percent: Mortgage Rates Edge Closer To All-Time Lows - 05/02/12 04:07 AM
Mortgages Rates are moderately improved to begin the week, taking them slightly lower than than April's best two days (4/10 and 4/23) and as close as they've been to all-time lows in several months. This further solidifies the Conventional 30yr Fixed Best-Execution Rate at 3.875%, which had recently shared the stage with 4.0%.
Keep in mind that "best-execution" as we calculate it, connotes the no-closing-cost rate for the best-qualified borrowers in the most ideal scenario. (read more about Best-Execution calculations). If your scenario is something less than flawless, and you were looking at a 4.0% rate on Friday, there's a chance … (2 comments)

percent: MBS RECAP: Late Day Weakness Preserves The Range - 05/02/12 03:59 AM
MBS and Treasuries looked like they might have been drifting into slightly better territory in the first part of the afternoon. But heading into the 3pm Treasury close, bond markets weakened somewhat, depositing Treasuries (with the exception of 30yr bonds, which got hit a bit harder) right at their earlier morning support levels (mid 1.92's) and MBS in the same old 2 tick range they'd held all day. We saw a few brief ticks at 103-24, but 90% of today's action was 103-26 to 103-28. That's really splitting hairs though... a 4 tick range is as narrow as they come in … (0 comments)

percent: MBS MID-DAY: Slow Start, But Positive - 05/02/12 03:54 AM
MBS are 3 ticks higher this morning in Fannie 3.5 coupons at 103-26, a mere eighth of a point off 4/10 highs. That said, the current range is the highest that production MBS have stably been, not to mention the fact that this jaunt is already more stable than previous visits. The only other scheduled economic data of the morning arrives in about 20 minutes with Chicago PMI. It's not normally a tremendous market mover, but its impact could be more noticeable today due to light volume.
8:38AM : ECON: Incomes Accelerate, Spending Decelerates, Inflation Tame
* Income +0.4 pct vs … (0 comments)

percent: MBS MID-DAY: Firm Resistance To Further Gains - 04/30/12 04:09 AM
"You shall not pass!" Resistance levels in bond markets joined the ranks of Gandalf and The Black Knight in uttering this phrase after last night's Spain Downgrade and this morning's GDP data. The "bridge" that bond markets are currently having a hard time crossing is the one that takes 10yr yields much below 1.94 or Fannie 3.5's much above 103-23, though there have been "attempts" to be sure (case in point: 10yr yields at 1.88+ overnight and into the high 1.92's this morning after GDP). The counterpoint is that there's potential support on the other side of that equation. For 10's, … (0 comments)

 
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